Compound Interest Calculator
Enter a deposit, an optional monthly contribution and a rate to see exactly what your money grows to, year by year, with the formula shown.
Leave at 0 for a one-time deposit.
Start-of-month deposits earn one extra month of interest.
- Initial deposit
- $10,000.00
- Total contributions
- $48,000.00
- Total deposits
- $58,000.00
- Total interest earned
- $86,572.72
- Interest share of final balance
- 59.9%
- Effective annual yield (APY)
- 7.229%
| Year | Deposits | Interest | Balance |
|---|---|---|---|
| 1 | $2,400 | $801 | $13,201 |
| 2 | $2,400 | $1,033 | $16,634 |
| 3 | $2,400 | $1,281 | $20,315 |
| 4 | $2,400 | $1,547 | $24,262 |
| 5 | $2,400 | $1,832 | $28,495 |
| 6 | $2,400 | $2,138 | $33,033 |
| 7 | $2,400 | $2,466 | $37,900 |
| 8 | $2,400 | $2,818 | $43,118 |
| 9 | $2,400 | $3,196 | $48,714 |
| 10 | $2,400 | $3,600 | $54,714 |
| 11 | $2,400 | $4,034 | $61,147 |
| 12 | $2,400 | $4,499 | $68,046 |
| 13 | $2,400 | $4,998 | $75,444 |
| 14 | $2,400 | $5,532 | $83,376 |
| 15 | $2,400 | $6,106 | $91,882 |
| 16 | $2,400 | $6,721 | $101,003 |
| 17 | $2,400 | $7,380 | $110,783 |
| 18 | $2,400 | $8,087 | $121,270 |
| 19 | $2,400 | $8,845 | $132,515 |
| 20 | $2,400 | $9,658 | $144,573 |
How this was calculated
- Convert the inputs: P = $10,000.00, r = 7% = 0.07 per year, n = 12 compounding periods per year, t = 20 years.
- Growth of the initial deposit: A = P(1 + r/n)^(nt) = $10,000.00 × (1 + 0.07/12)^(12 × 20) = $40,387.39.
- Monthly contributions use the monthly rate equivalent to monthly (12/yr) compounding: i = (1 + r/n)^(n/12) − 1 = 0.5833%, over N = 240 months.
- Future value of the contributions (ordinary annuity, paid at the end of each month): FV = PMT × ((1 + 0.005833)^240 − 1) / 0.005833 = $200.00 × … = $104,185.33.
- Final balance = $40,387.39 + $104,185.33 = $144,572.72.
- Total deposits = $10,000.00 + $200.00 × 240 = $58,000.00; interest earned = $144,572.72 − $58,000.00 = $86,572.72.
Results assume a constant rate and ignore taxes, fees and inflation. This is an estimate, not financial advice.
How this compound interest calculator works
Compound interest means you earn interest on your interest. Each time the account compounds, that period's interest is added to the balance, and the next period's interest is calculated on the bigger number. This compound interest calculator applies the standard formula to your initial deposit and then adds your monthly contributions month by month, so the year-by-year table is exact rather than an approximation.
The formula for a one-time deposit is A = P(1 + r/n)nt, where P is the deposit, r is the annual rate as a decimal, n is how many times per year interest compounds, and t is the number of years. Regular contributions use the future-value-of-an-annuity formula: FV = PMT × ((1 + i)N − 1) / i, where i is the monthly rate and N the number of months. Open "How this was calculated" under the result to see both formulas filled in with your numbers.
Worked example
Put $10,000 in an account paying 5% compounded monthly and leave it for 10 years. The monthly rate is 0.05 / 12 = 0.004167, and there are 120 months, so A = 10,000 × (1.004167)120 = $16,470.09. Simple interest would have paid only $5,000; compounding added an extra $1,470 without you doing anything.
Now add $200 a month on top. Those deposits alone grow to about $31,056 (120 payments of $200 is $24,000, so roughly $7,000 of that is interest). The combined balance is around $47,500, of which $34,000 is money you put in and $13,500 is interest. Run it for 30 years instead and interest overtakes deposits: the balance passes $210,000 on $82,000 of deposits.
Daily vs. monthly vs. annual compounding
More frequent compounding helps, but less than most people expect. At 5%, $10,000 for 10 years ends at $16,289 compounded annually, $16,470 monthly and $16,487 daily. The rate matters far more than the frequency: going from 5% to 6% adds about $1,700, going from monthly to daily adds $17. Banks quote an APY (annual percentage yield) precisely so you can compare accounts without worrying about the compounding schedule; the calculator shows the APY that corresponds to your inputs.
Common mistakes
- Entering 0.05 instead of 5. The rate field takes a percent. 0.05% will make the result look broken.
- Mixing up contributions and the initial deposit. The initial deposit is paid once; the contribution is paid every month for the whole term.
- Forgetting that the rate is a guess. A savings account pays what it says, but a 7% stock market return is a long-run average with years of −20% and +30% mixed in.
When the result is misleading
The calculator assumes a fixed rate for the whole period and ignores taxes, fees and inflation. In a taxable account, interest is taxed every year, which slows compounding. In an index fund, a 1% fee on a 7% return removes roughly a quarter of your ending balance over 30 years. And at 3% inflation, a balance that doubles in 24 years has not actually grown in purchasing power. Use the tool to compare scenarios, then think about what you would really keep.
Frequently asked questions
›What is the compound interest formula?
A = P(1 + r/n)^(nt), where P is the starting deposit, r the annual rate as a decimal, n the number of compounding periods per year and t the years. For $10,000 at 5% compounded monthly for 10 years, A = 10,000 × (1 + 0.05/12)^120 = $16,470.09.
›How are monthly contributions handled?
Each contribution is added every month and then earns interest at the monthly rate equivalent to your compounding frequency. The total equals the future value of an annuity: PMT × ((1 + i)^N − 1) / i, plus the growth of the initial deposit.
›Does daily compounding make a big difference?
Not much. $10,000 at 5% for 10 years ends at $16,289 with annual compounding, $16,470 monthly and $16,487 daily. The rate matters far more than the frequency.
›What is the difference between contributions at the start and the end of the month?
Start-of-month contributions earn one extra month of interest each, so the final balance is higher by one month's rate, roughly 0.4% at a 5% annual rate.
›Does the calculator include taxes or inflation?
No. It shows nominal growth at a constant rate. To estimate purchasing power, subtract expected inflation from the rate (for example use 4% instead of 7%).